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37th PARLIAMENT, 3rd SESSION

Standing Committee on Public Accounts

EVIDENCE

CONTENTS

Wednesday, April 28, 2004

1535

The Chair (Mr. John Williams (St. Albert, CPC))

Mr. Rob Walsh (Law Clerk and Parliamentary Counsel, House of Commons)

The Chair

Hon. Robert Thibault (West Nova, Lib.)

The Chair

1540

1545

Hon. Joe Jordan (Leeds—Grenville, Lib.)

The Chair

Hon. Robert Thibault

The Chair

Mr. Rob Walsh

The Chair

Mr. Gregory Tardi (Senior Legal Counsel, Legal Services, House of Commons)

1550

The Chair

Mr. Gregory Tardi

The Chair

Mr. Gregory Tardi

The Chair

Hon. Walt Lastewka (St. Catharines, Lib.)

The Chair

Hon. Walt Lastewka

The Chair

Mr. Gregory Tardi

The Chair

Hon. Robert Thibault

The Chair

Hon. Robert Thibault

The Chair

Mrs. Diane Ablonczy (Calgary—Nose Hill, CPC)

The Chair

Hon. Shawn Murphy (Hillsborough, Lib.)

The Chair

Hon. Shawn Murphy

1555

The Chair

Mr. Rob Walsh

The Chair

Hon. Walt Lastewka

The Chair

Hon. Walt Lastewka

The Chair

Hon. Walt Lastewka

The Chair

Mr. Odina Desrochers (Lotbinière—L'Érable, BQ)

The Chair

Hon. Robert Thibault

1600

The Chair

Mr. Rob Walsh

The Chair

Mr. Dennis Mills (Toronto—Danforth, Lib.)

The Chair

Mr. Dennis Mills

The Clerk of the Committee

Mr. Dennis Mills

The Chair

Mr. Odina Desrochers

The Chair

Mr. David Myer (As Individual)

The Chair

Mr. David Myer

The Chair

Mr. Steven Levitt (Counsel to David Myer, As Individual)

The Chair

Mr. David Myer

The Chair

Mr. David Myer

The Chair

Mr. David Myer

The Chair

Mr. David Myer

The Chair

Mr. David Myer

The Chair

Mr. David Myer

1605

1610

The Chair

Mr. Jason Kenney (Calgary Southeast, CPC)

The Chair

Ms. Judy Wasylycia-Leis (Winnipeg North Centre, NDP)

The Chair

Mr. Vic Toews (Provencher, CPC)

Mr. David Myer

Mr. Vic Toews

Mr. David Myer

Mr. Vic Toews

Mr. David Myer

Mr. Vic Toews

1615

Mr. David Myer

Mr. Vic Toews

Mr. David Myer

Mr. Vic Toews

Mr. David Myer

Mr. Vic Toews

1620

Mr. David Myer

Mr. Vic Toews

Mr. David Myer

Mr. Vic Toews

Mr. David Myer

Mr. Vic Toews

Mr. David Myer

Mr. Vic Toews

Mr. David Myer

Mr. Vic Toews

Mr. David Myer

Mr. Vic Toews

Mr. David Myer

Mr. Vic Toews

Mr. David Myer

The Chair

Mr. Odina Desrochers

Mr. David Myer

Mr. Odina Desrochers

Mr. David Myer

Mr. Odina Desrochers

Mr. David Myer

1625

Mr. Odina Desrochers

Mr. David Myer

Mr. Odina Desrochers

Mr. David Myer

Mr. Odina Desrochers

Mr. David Myer

Mr. Odina Desrochers

Mr. David Myer

Mr. Odina Desrochers

Mr. David Myer

Mr. Odina Desrochers

Mr. David Myer

Mr. Odina Desrochers

Mr. David Myer

Mr. Odina Desrochers

Mr. David Myer

Mr. Odina Desrochers

1630

Mr. David Myer

The Chair

Hon. Shawn Murphy

Mr. David Myer

Hon. Shawn Murphy

Mr. David Myer

Hon. Shawn Murphy

Mr. David Myer

Hon. Shawn Murphy

Mr. David Myer

Hon. Shawn Murphy

Mr. David Myer

Hon. Shawn Murphy

Mr. David Myer

Hon. Shawn Murphy

Mr. David Myer

Hon. Shawn Murphy

Mr. David Myer

Hon. Shawn Murphy

Mr. David Myer

Hon. Shawn Murphy

Mr. David Myer

Hon. Shawn Murphy

Mr. David Myer

Hon. Shawn Murphy

Mr. David Myer

Hon. Shawn Murphy

Mr. David Myer

1635

Hon. Shawn Murphy

Mr. David Myer

Hon. Shawn Murphy

Mr. David Myer

Hon. Shawn Murphy

Mr. David Myer

Hon. Shawn Murphy

Mr. David Myer

Hon. Shawn Murphy

Mr. David Myer

Hon. Shawn Murphy

Mr. David Myer

Hon. Shawn Murphy

Mr. David Myer

Hon. Shawn Murphy

Mr. David Myer

Hon. Shawn Murphy

Mr. David Myer

The Chair

Hon. Robert Thibault

The Chair

Hon. Robert Thibault

The Chair

Hon. Walt Lastewka

The Chair

1640

Mr. David Myer

The Chair

Ms. Judy Wasylycia-Leis

Mr. David Myer

Ms. Judy Wasylycia-Leis

Mr. David Myer

Ms. Judy Wasylycia-Leis

Mr. David Myer

Ms. Judy Wasylycia-Leis

Mr. David Myer

Ms. Judy Wasylycia-Leis

Mr. David Myer

Ms. Judy Wasylycia-Leis

Mr. David Myer

Ms. Judy Wasylycia-Leis

Mr. David Myer

Ms. Judy Wasylycia-Leis

Mr. David Myer

Ms. Judy Wasylycia-Leis

Mr. David Myer

Ms. Judy Wasylycia-Leis

Mr. David Myer

Ms. Judy Wasylycia-Leis

Mr. David Myer

Ms. Judy Wasylycia-Leis

Mr. David Myer

Ms. Judy Wasylycia-Leis

Mr. David Myer

Ms. Judy Wasylycia-Leis

1645

Mr. David Myer

Ms. Judy Wasylycia-Leis

Mr. David Myer

Ms. Judy Wasylycia-Leis

Mr. David Myer

Ms. Judy Wasylycia-Leis

Mr. David Myer

Ms. Judy Wasylycia-Leis

The Chair

Mr. David Myer

The Chair

Mr. David Myer

The Chair

Mrs. Diane Ablonczy

Mr. David Myer

Mrs. Diane Ablonczy

Mr. David Myer

Mrs. Diane Ablonczy

1650

Mr. David Myer

Mrs. Diane Ablonczy

Mr. David Myer

Mrs. Diane Ablonczy

Mr. David Myer

Mrs. Diane Ablonczy

Mr. David Myer

Mrs. Diane Ablonczy

Mr. David Myer

Mrs. Diane Ablonczy

Mr. David Myer

Mrs. Diane Ablonczy

Mr. David Myer

Mrs. Diane Ablonczy

Mr. David Myer

Mrs. Diane Ablonczy

Mr. David Myer

Mrs. Diane Ablonczy

Mr. David Myer

Mrs. Diane Ablonczy

Mr. David Myer

Mrs. Diane Ablonczy

1655

Mr. David Myer

Mrs. Diane Ablonczy

Mr. David Myer

Mrs. Diane Ablonczy

The Chair

Hon. Robert Thibault

Mr. David Myer

Hon. Robert Thibault

Mr. David Myer

Hon. Robert Thibault

Mr. David Myer

Hon. Robert Thibault

Mr. David Myer

Hon. Robert Thibault

Mr. David Myer

Hon. Robert Thibault

Mr. David Myer

1700

Hon. Robert Thibault

Mr. David Myer

Hon. Robert Thibault

Mr. David Myer

Hon. Robert Thibault

Mr. David Myer

Hon. Robert Thibault

Mr. David Myer

Hon. Robert Thibault

The Chair

Hon. Robert Thibault

Mr. David Myer

Hon. Robert Thibault

Mr. David Myer

Hon. Robert Thibault

Mr. David Myer

Hon. Robert Thibault

Mr. David Myer

Hon. Robert Thibault

The Chair

Hon. Joe Jordan

The Chair

Hon. Joe Jordan

Mr. David Myer

Hon. Joe Jordan

Mr. David Myer

Hon. Joe Jordan

Mr. David Myer

Hon. Joe Jordan

1705

Mr. David Myer

Hon. Joe Jordan

Mr. David Myer

Hon. Joe Jordan

The Chair

Mr. Dennis Mills

Mr. David Myer

Mr. Dennis Mills

Mr. David Myer

Mr. Dennis Mills

Mr. David Myer

Mr. Dennis Mills

Mr. David Myer

Mr. Dennis Mills

Mr. David Myer

1710

Mr. Dennis Mills

Mr. David Myer

Mr. Dennis Mills

Mr. David Myer

Mr. Dennis Mills

Mr. David Myer

Mr. Dennis Mills

Mr. David Myer

Mr. Dennis Mills

The Chair

Mr. Vic Toews

Mr. David Myer

Mr. Vic Toews

Mr. David Myer

Mr. Vic Toews

Mr. David Myer

Mr. Vic Toews

Mr. David Myer

Mr. Vic Toews

1715

Mr. David Myer

Mr. Vic Toews

Mr. David Myer

Mr. Vic Toews

Mr. David Myer

Mr. Vic Toews

Mr. David Myer

Mr. Vic Toews

Mr. David Myer

Mr. Vic Toews

Mr. David Myer

Mr. Vic Toews

Mr. David Myer

The Chair

Mr. Alan Tonks (York South—Weston, Lib.)

Mr. David Myer

1720

Mr. Alan Tonks

Mr. David Myer

Mr. Alan Tonks

Mr. David Myer

Mr. Alan Tonks

Mr. David Myer

Mr. Alan Tonks

Mr. David Myer

Mr. Alan Tonks

Mr. David Myer

Mr. Alan Tonks

Mr. David Myer

Mr. Alan Tonks

Mr. David Myer

Mr. Alan Tonks

Mr. David Myer

Mr. Alan Tonks

1725

Mr. David Myer

Mr. Alan Tonks

Mr. David Myer

Mr. Alan Tonks

Mr. David Myer

The Chair

Hon. Walt Lastewka

Mr. David Myer

Hon. Walt Lastewka

Mr. David Myer

Hon. Walt Lastewka

Mr. David Myer

Hon. Walt Lastewka

Mr. David Myer

Hon. Walt Lastewka

Mr. David Myer

Hon. Walt Lastewka

Mr. David Myer

Hon. Walt Lastewka

Mr. David Myer

Hon. Walt Lastewka

Mr. David Myer

Hon. Walt Lastewka

Mr. David Myer

Hon. Walt Lastewka

Mr. David Myer

Hon. Walt Lastewka

Mr. David Myer

Hon. Walt Lastewka

Mr. David Myer

Hon. Walt Lastewka

Mr. David Myer

Hon. Walt Lastewka

Mr. David Myer

1730

Hon. Walt Lastewka

Mr. David Myer

Hon. Walt Lastewka

The Chair

Mr. David Myer

The Chair

Mr. David Myer

The Chair

Mr. David Myer

The Chair

Mr. Dennis Mills

Mr. David Myer

Mr. Dennis Mills

Mr. David Myer

Mr. Dennis Mills

The Chair

Mr. David Myer

The Chair

CANADA

Standing Committee on Public Accounts

NUMBER 035

3rd SESSION

37th PARLIAMENT

EVIDENCE

Wednesday, April 28, 2004

[Recorded by Electronic Apparatus]

¹ (1535)

[English]

The Chair (Mr. John Williams (St. Albert, CPC)): Good afternoon, everybody.

The orders of today are, pursuant to Standing Order 108(3)(g), chapter 3, “The Sponsorship Program”, chapter 4, “Advertising Activities”, and chapter 5, “Management of Public Opinion Research”, of the November 2003 report of the Auditor General of Canada, referred to the committee on February 10, 2004.

Our witness today is, as an individual, Mr. David Myer.

Moving to the tabling of documents, I have a letter from Public Works and Government Services from the deputy minister, Mr. I. David Marshall, addressed to Mr. Jeremy LeBlanc and dated April 27, 2004:

Dear Mr. LeBlanc:

At its hearings of March 23, 2004, the Standing Committee requested the names of “all assistants and policy advisers to the Minister of Public Works and Government Services who had responsibility for the sponsorship file between June 1997 and June 2002”. The attached list responds to this request and is provided in both official languages.

Please note that our records do not specify those assistants who were responsible specifically for the sponsorship file. Therefore, we have listed the names of assistants and policy advisers who worked for Ministers Gagliano, Boudria and Goodale during this period. This information is provided to the Committee pursuant to Section 8(2)(m)(i) of the Privacy Act.

I trust this will be satisfactory to the Committee.

Mr. Law Clerk, this information is provided to us pursuant to subparagraph 8(2)(m)(i) of the Privacy Act. Is it perfectly okay for me to table this document, the list of names of people who worked in the public service as assistants and policy advisers to ministers of Public Works and Government Services?

Mr. Rob Walsh (Law Clerk and Parliamentary Counsel, House of Commons): Mr. Chairman, I would want to have a moment to refer to that section, but let me say that the invocation of that section by the author of this letter is for his purposes and not for the purposes of this committee. If this committee wishes to table or distribute this letter, in my view it's entitled to do so.

The Chair: I have the list here; it's strictly names of people and their titles. Is it acceptable that I table this document?

Some hon. members: Agreed.

The Chair: The document is tabled and made public.

I have a reasonably long letter here from the Auditor General that I would like to read into the record.

An hon. member: Dispense.

The Chair: I've read everything into the record so far. For those who are watching--and I understand many people are watching--it's good that I do.

Moving right along, I note it's a letter dated April 28, 2004--

Hon. Robert Thibault (West Nova, Lib.): Mr. Chair, I don't think it's quite true that you've read everything into the record. When one of our witnesses was here--I believe it was Mr. Guité--he brought a letter from his solicitor and that wasn't read into the record.

The Chair: Every time I've tabled documents, at the beginning of every meeting, I've always read everything that has been given to me.

It's from the Auditor General of Canada to me as the chair.

Dear Mr. Williams:

We look forward to our meeting with the Committee on Monday, May 3, 2004 to discuss chapters 3, 4, and 5 of our November 2003 Report. We would be pleased to clarify our findings and to respond to questions any members may have. I am providing you with this letter to help members prepare for the hearing. I have not commented publicly about the testimony of other witnesses who have appeared before you. I believe that it is more appropriate to save my comments for this hearing.

Our findings on the government's sponsorship program from 1997 to 2001 are serious. The audit indicates widespread non-compliance with contracting rules. Documentation was poor and there was little evidence of analysis to support the expenditure of more than $250 million. As well, in a small number of cases, sponsorship funds were transferred to Crown corporations and other government organizations by highly questionable methods. Not only did these practices circumvent the Treasury Board, they also failed to respect both the parliamentary appropriations process and Parliament itself.

Professional practices to ensure accuracy

The primary function of our Office is to serve Parliament. We do this by conducting independent audits and studies that provide objective information, advice, and assurance. Fundamental to our ability to do so, and to serve the Committee, is the credibility of our Office. And we recognize that this credibility could be affected by inaccuracies in our reports. That is why we go to great lengths to ensure that the facts we present in our reports are accurate. I want to assure the Committee that I stand behind our report, the accuracy of the facts it contains, and the conclusions we reached.

One of the key aspects of our quality control system is ensuring that sufficient, appropriate evidence is obtained to support our conclusions. We follow the standards of the Canadian Institute of Chartered Accountants, and the guidance and methodology developed by our Office. Our internal review practices are extensive.

As members of the Committee are aware, an international team drawn from the audit offices of the United Kingdom, France, Norway, and the Netherlands recently confirmed that our practices are sound and our audits provide independent, objective information that members of Parliament can rely on.

Another key aspect of our quality control system is that we ask the entities we audit to confirm the facts in our reports. We give government departments and agencies an opportunity to review our text and bring forward any errors in fact, omissions, or interpretations they disagree with. We ask the heads of the entities to sign off at the end of the audit and inform my Office in writing of any outstanding factual concern they may have.

In the case of chapters 3, 4, and 5 of our November Report, all of these processes were followed. Furthermore, the heads (or their delegates) of the departments and Crown corporations mentioned in the Report--including Mr. Guilbert for Canada Post, Mr. LeFrançois for VIA Rail, Mr. Marquis for the Business Development Bank of Canada (BDC), Mr. Marshall for Public Works and Government Services Canada (PWGSC), and Mr. McKenzie for Communication Canada--signed letters confirming the facts in our report. These letters are attached.

When a department does not agree with our findings, we say so in the text of our audit report. For example, in Chapter 3, paragraph 3.39 we wrote that we had a different view from Treasury Board Secretariat officials on the government's transfer payment policy. You will also note that we clearly stated in our chapter that Canada Post considered its participation in the Maurice Richard project and in “le Concours création de timbres” as marketing activities and not sponsorship. This in no way changes our conclusion.

Other audits and reviews that corroborate our findings

In addition, we also reviewed the work of other auditors, including Internal Audit at PWGSC, their Quick Response Team (QRT), and the forensic firm hired by PWGSC to conduct an administrative review. Their findings were similar to ours.

For example, the Quick Response Team concluded that

“Most of the 126 files of primary interest that were reviewed had deficiencies from a records management perspective. Many files were incomplete, and lacked project information such as requests from organizers, contractual agreements, deliverables lists, signed requisitions, invoices and post mortem reports. This lack of documentation made it difficult to determine whether or not deliverables were met or delivered.”

¹ (1540)

It is worth noting that, after the QRT review, the government referred several files to the RCMP for investigation.

In addition, PWGSC hired the forensic audit firm, Kroll Lindquist Avery, to conduct an administrative review, which we refer to in paragraph 3.98 of Chapter 3. The review reports, which I understand your Committee has requested from PWGSC, present the results of examining 136 files. The reports provide considerable detail on each file examined. They identify problems in a wide range of areas, including non-compliance with the Financial Administration Act and the Treasury Board policy. I think that you will find that the Kroll reports clearly illustrate the problems that we have also noted in our report.

Production fees and commissions

In our report, we note that over $100 million was paid to communications agencies as production fees and commissions. This is a fact. We have never stated that $100 million was missing or stolen. We would have liked to provide a more detailed breakdown of the amounts paid, but were unable to do so. The government was unable to accurately distinguish between production fees and commissions. Consequently, we could only present a combined amount. The lack of documentation was one reason, but in many cases production fees included commissions for work sub-contracted to other agencies. Finally, an impression seems to have been created that there were only problems related to the commissions, but there were problems related to the production fees as well. The administrative review reports discuss this point in great deal.

Documentation

During our audit, we asked for all relevant documents. Some testimony before the Committee has suggested that documentation may have existed in the files of the advertising agencies. I would like to remind the Committee that the government needs relevant and sufficient documentation before authorizing payments.

Good management practice requires documentation that clearly describes what the government is intending to purchase, and evidence that substantiates the receipt of goods or services before final payment. The government's contracting policy recommends files be properly documented and be able to withstand public scrutiny. Further, the Supply Manual of PWGSC states that a file on a contract serves as a historical record and an accurate audit trail.

Files should show why an event was being sponsored, and there should be some analysis to support the amount of the sponsorship. The contracts with the communications agencies required a visibility plan that would show what volume, level, or quantity of visibility was to be achieved. There was also a requirement for an assessment of the visibility actually received, before final payment.

In addition, section 34 of the Financial Administration Act requires that before payment, the person approving the payment certify (i) that the work has been performed, the goods supplied or the service rendered, as the case may be, and that the price charged is according to the contract, or if not specified in the contract, is reasonable; (ii) and where, pursuant to the contract, a payment is to be made before the completion of the work, delivery of the goods or rendering of the service, as the case may be, that the payment is according to the contract.

It is not good enough to hope or believe that documentation is retained by other parties. Relevant documentation is a necessity for officials to properly approve payment and meet their obligations under the Financial Administration Act.

In closing, I would like to reaffirm my view that these issues are serious. I note that the government also takes them seriously, as their response to the audit shows. In fact, the government began to address many of the deficiencies noted in the management of the sponsorship program. Our report mentions many of the improvements introduced by Communication Canada.

I trust that this information will be of assistance to the Committee as it reviews the evidence gathered in its hearings. I look forward to providing further clarification to members at the hearing next week.

Yours sincerely,

Sheila Fraser, FCA

Auditor General of Canada

And there are copies to Ms. Elizabeth Kingston and Mr. Jeremy LeBlanc, the clerks of the committee.

That document is read, public, tabled, and so on.

Mr. Jordan.

¹ (1545)

Hon. Joe Jordan (Leeds—Grenville, Lib.): Just as a quick point on that, yesterday I asked the Public Works auditors for documentation on what would constitute a complete file. I think the Auditor General has answered that here.

Because I was the one who asked...I don't think we need to get them to do it. I think the Auditor General has done an excellent job of explaining that in here.

The Chair: I expect that a letter is likely forthcoming anyway, because he did actually have the information. It's going to be given at the end of the meeting. I forgot.

Monsieur Thibault, s'il vous plaît.

Hon. Robert Thibault: Mr. Chair, the Auditor General, as well as yesterday the member of the quick response team, both refer to the Kroll Lindquist Avey study. You have mentioned that you already asked that copies be furnished to the committee. Do we have any information as to when we will be receiving that?

The Chair: We are hoping, and Mr. Lastewka can perhaps—oh, Mr. Walsh.

Mr. Rob Walsh: Mr. Chairman, my colleague Greg Tardi, who is here, has had a recent exchange with the public works department on this very matter, and I would ask the committee to hear a report from Mr. Tardi.

The Chair: Mr. Tardi.

Mr. Gregory Tardi (Senior Legal Counsel, Legal Services, House of Commons): Mr. Chairman, I was out of earshot when the question was put, but I presume it relates to the Lindquist Avey report.

¹ (1550)

The Chair: Yes, the question was asked, since we should be getting it, whether there is a problem. Have you had discussion with Public Works, and what are your comments on the Lindquist Avey report?

Mr. Gregory Tardi: I have indeed had consultations with an official of the Department of Public Works twice today, Mr. Chairman. The Lindquist Avey report is now in the hands of the department, ready to be handed over on certain specific conditions.

The department has two problems. One is in the domain of access to information and privacy. I am informed that the report contains certain items of personal information that they would prefer to have dealt with in camera. What they have asked me to transmit to you is a request that the committee receive copies of the report in camera, deal with it in camera, and not make the contents public.

The Chair: Is that it?

Mr. Gregory Tardi: No, that's not it; there's a little bit more.

There's a second line of objection, which is that the RCMP have difficulty with public use of the report. I asked what the RCMP's objection was and was told that the Public Works officials don't know, for the time being. They have undertaken to consult with the RCMP, but those consultations haven't yet taken place, as far as I know.

I was asked to transmit all of this to you.

The Chair: Thank you.

Mr. Thibault, Ms. Ablonczy, Mr. Murphy, Mr. Lastewka, Mr. Desrochers.

Mr. Thibault.

Just a second. Mr. Lastewka, do you have something to add to this that might help?

Hon. Walt Lastewka (St. Catharines, Lib.): From brief conversation, I think it's important that the document be forwarded to Mr. Walsh and that Mr. Walsh look through the document and the department's concerns—

The Chair: Order, please.

Hon. Walt Lastewka: —and that Mr. Walsh advise us, as a committee, on how to proceed.

The Chair: On the first point, yes, we'll just have that report forwarded to Mr. Walsh at this point in time. Whatever else we decide, at least we'll get it there.

Continue, Mr. Tardi. Do you have anything else?

Mr. Gregory Tardi: That's it, Mr. Chairman.

The Chair: So we've agreed that Mr. Walsh will get the report. We can discuss later on what we want to do.

Mr. Thibault.

Hon. Robert Thibault: That's the question I have. Will we have this discussion at a later date as to how we handle the report?

I will give you some preliminary thoughts. I don't pretend to be speaking for our side or for anybody but myself as an individual and a member of this committee. I have great concern with in camera evidence.

The Chair: Me too, yes.

Hon. Robert Thibault: I think I have mentioned that many times.

The other consideration we could have is that irrelevant information be blocked out and that we not see it. That might reduce the report so much that it is has no value.

The third is always that we could consider—and we'll have a full discussion, I'm sure, later—whether we can proceed without this report, because what we've seen from the quick response team and from the Auditor General tends to all go in the same direction and would probably be further confirmed by this report, I would presume.

The Chair: Along those lines, I also have very serious concern about in camera meetings. A thought, again speaking as an individual, crossed my mind, that if they were to bring numbered reports to us for us to look at, then we could hand them back and let the censored report out in the public. I think we may want to reduce and set a limit on the private and the personal information, but I think this report should be made public as well.

I'm going to go through the list, Mr. Thibault.

Ms. Ablonczy, Mr. Murphy, Mr. Lastewka, and Mr. Desrochers.

Mrs. Diane Ablonczy (Calgary—Nose Hill, CPC): Mr. Chairman, I take special note in this report of the Auditor General's comment that:

In our report, we note that over $100 million was paid to communications agencies as production fees and commissions. This is a fact. We have never stated that $100 million was missing or stolen.

Now, Mr. Chairman, we have one member of this committee who repeatedly suggests that the Auditor General says $100 million is missing or stolen. I hope in light of these comments that those kinds of allegations will cease and desist from being made, Mr. Chair.

The Chair: That's very good; however, you're kind of off topic, Ms. Ablonczy. We're...

Order, order.

We are dealing with the issue of the Kroll Lindquist report and how we can get that out into the public domain.

Mr. Murphy.

Hon. Shawn Murphy (Hillsborough, Lib.): Yes, Mr. Chairman, I agree with Mr. Thibault's sentiments, which I understand are shared by yourself. But I have another concern too, Mr. Chairman, and that is this whole issue of the RCMP pulling the strings of the committee. This document is, or ought to be, a public document. It should be brought before the committee. I don't know how parliamentary privilege or this can lead to other evidence. I don't see any impropriety or anything wrong in bringing this document forward.

Perhaps the clerk will comment, but again, if there's parliamentary privilege.... I know what you're saying—the evidence here can't be used—but they've got the report and this is after the fact, so I think they're trying to pull our chain. I think we should just say, listen, you do your investigation, we'll do ours, and thank you very much.

The Chair: We should respect the Privacy Act.

Hon. Shawn Murphy: The Privacy Act... we can eliminate some of that. Again, I think we can—

¹ (1555)

The Chair: The idea is that we all get a full copy of the report and then we turn it back in, and we allow the one that addresses the Privacy Act to go out in public.

Mr. Walsh.

Mr. Rob Walsh: Mr. Chairman, I just want to make three points quite briefly.

First, with regard to the committee's decision, you decided that I shall take a look at this report, and I understand that instruction to be to review the unexpurgated version and to review those portions of it that the department is saying ought not to be made public by virtue of the Privacy Act, and then to report to you on whether I consider that an appropriate objection.

Two other points, perhaps more salient, are that in the letter that you read to this committee earlier this afternoon—the one from the deputy minister to the clerk of the committee dated April 27—and you asked me about this earlier, Mr. Marshall is invoking subparagraph 8(2)(m)(i) of the Privacy Act. That is the provision that is generally an exception to the privacy requirements of that act in that it allows disclosure where it's in the public interest. In my view, if the document attached to this letter is, in the view of the deputy minister, to be disclosed contrary to the provisions of the Privacy Act because of public interest, I would have thought the same consideration would apply equally to any other document insofar as this proceeding has the same objective.

Secondly, with regard to the RCMP, one has to remember that none of us here was privy to the conversation that may have taken place between the RCMP and the public works department. In some circumstances, depending on how that conversation happened, if it was along the lines of the RCMP suggesting to the department that it not make the document available to this committee—and I don't know if that was the tenor of their remarks, but if it was the nature of their communication with the department—one might suggest that was an interference, and an improper interference, with the proceedings of this committee of a kind that in some circumstances could be characterized as a contempt of the House. No person or organization should obstruct the provision of information to this committee. I'm not suggesting this matter warrants further inquiry, but it's a kind of shot across the bow, if you like, in my view, to various organizations out there that there ought not to be interfering with the provision of information to this committee by anyone, including a department of government.

The Chair: All right.

Mr. Lastewka and Mr. Desrochers.

Hon. Walt Lastewka: I just want to go back to my original comments. I felt that the full report should be turned over to Mr. Walsh. Mr. Walsh is the legal counsel for our committee, and he should advise us on how to proceed, taking everything into consideration.

The Chair: I agree with that, Mr. Lastewka. Depending on what Mr. Walsh would say, I like the idea that the full report be made available to us, we'll turn these back in, and a report that respects the Privacy Act could be made public. This depends on what Mr. Walsh says.

Hon. Walt Lastewka: Mr. Chairman—

The Chair: That's not a decision. It's only my personal opinion.

Hon. Walt Lastewka: All right, contrary to your personal opinion, I think it should be left in the hands of Mr. Walsh.

The Chair: Yes.

Monsieur Desrochers, s'il vous plaît.

[Translation]

Mr. Odina Desrochers (Lotbinière—L'Érable, BQ): Thank you, Mr. Chairman.

I too am relying on Mr. Walsh's judgment. However, I wouldn't want us to end up with a report that is missing some important elements. If the document is mentioned by the Auditor General, then Mr. Walsh should only delete the portions that concern people's private lives.

I've also had it with the RCMP interfering with the work of the Public Accounts Committee. I thought we'd agreed on this point, Mr. Chairman, when we heard from them in regards to a specific case. The RCMP made it clear that this was an exceptional case. An exception remains just that. We have an agenda, we have work to do and we're not about to stand for the RCMP telling us how to do our work.

[English]

The Chair: Okay. I will instruct the clerks to advise Public Works to deliver a copy of the report to the law clerk, who will then advise us at the earliest possible date of what he sees.

Did you have a final point, Mr. Thibault?

Hon. Robert Thibault: I accepted what you said, Mr. Chair, was your personal point. I've had concerns, as I've mentioned before, about something that would be equivalent to the number of...because I can't guarantee, and I don't think any one of us here can, that there won't be leaks. That's always a big concern.

What I would ask Mr. Walsh, through you, that would maybe be a part of his study that could be done when he looks at the report, is to see whether it would still be of value to the committee if the parts that contain private information were whited out, if the parts the RCMP would be concerned about were whited out, and if both were whited out—not to make a decision, but to bring that information back to inform us, so we could take a further decision.

The other question I put to the committee to consider is this. Like everybody else, I'm concerned that we not be dictated to by any other agency, but that we think of what our role is and what it is we want to accomplish. I don't think any of us would want to do anything that would prejudice what could be in the courts at a future date. We want those who may have done an illegal act and are brought to justice to be treated fully in accordance with justice and not be limited because of things that may have happened here.

º (1600)

The Chair: We must be concerned about the courts of justice.

Mr. Walsh.

Mr. Rob Walsh: Just as a footnote to Mr. Thibault's remarks, following on my own remarks earlier about the RCMP, in my view the proper course of action would be for the RCMP to speak to the chair of this committee about the disclosure of that document, not to go to the department of government.

The Chair: Okay. I will therefore ask the clerks to contact the RCMP and have them come forward with their concerns.

Now turning to our witnesses—

Mr. Dennis Mills (Toronto—Danforth, Lib.): Mr. Chair, before we go on , I have a short intervention.

The Chair: Mr. Mills.

Mr. Dennis Mills: Yesterday, government officials were here talking about these 126 files. I wonder—speaking through you to the clerks—whether we've received the information they readily had but that none of us had. Do we have all of the information we asked for yet?

The Clerk of the Committee: Mr. Chairman, we have not yet received that information from Public Works, nor have I gotten an indication as to when—

Mr. Dennis Mills: Well, could we please find out today from the deputy minister when we are going to get all of that information, which they apparently had?

The Chair: Okay. We will pass that on today; we will be in contact with Public Works this very afternoon.

If there are no further interventions, let us get on to our witnesses.

Mr. Desrochers.

[Translation]

Mr. Odina Desrochers: I'd like to clarify something. We received a letter today confirming that Mrs. Sheila Fraser is willing to meet again with the committee.

Could we possibly ask the AG to discuss the $100 million, the $150 million and the $250 million figures with us? I know we've spent a great deal of time focusing on the $100 million, but I'd also like to hear about the other $150 million, which gives us final tally of $250 million.

I think it's normal to have some information about all three components. We've be hearing a great deal about $100 million, about events and so forth since launching our investigation. However, we haven't talked a lot about the $150 million. I'd like the AG to discuss some specifics, to shed some light on the whole affair, Mr. Chairman.

[English]

The Chair: I'm sure she will take note of your remarks and will come prepared accordingly.

Moving on to our witnesses, we welcome you, Mr. Myer.

The first thing is we're going to ask you to take the oath. All witnesses are sworn in at this point in time. Would you do that, please?

Mr. David Myer (As Individual): The evidence I shall give on this examination shall be the truth, the whole truth, and nothing but the truth, so help me God.

The Chair: I believe you're accompanied by Mr. Steven Levitt, your lawyer. Is that correct?

Mr. David Myer: That's correct.

The Chair: Mr. Levitt, all questions will be directed to Mr. Myer. If you wish to consult your client, you of course may do so at any time. We will not ask questions of you, but you may consult your client, or he may consult you at any time he so desires. Is that okay?

Mr. Steven Levitt (Counsel to David Myer, As Individual): Thank you, Mr. Chairman.

The Chair: First of all, Mr. Myer—and I read this for everybody; you're not singled out on this:

...the refusal to answer questions or failure to reply truthfully may give rise to a charge of contempt of the House, whether the witness has been sworn in or not. In addition, witnesses who lie under oath may be charged with perjury.

That comes from House of Commons Procedure and Practice, by Marleau and Montpetit, on page 862.

Here is a question to you. You're appearing before us as an individual this afternoon. Did you discuss or have any meetings with any employees of the Government of Canada, former employees of the Government of Canada, or any members of this committee in preparation of your report before coming to this meeting?

Mr. David Myer: Yes, I did.

The Chair: Who was that?

Mr. David Myer: I spoke with some of the people who are employed in my office about my appearance here, just to refresh my memory on some of the things that had occurred back a few years ago.

The Chair: You're appearing before us as an individual. Are you still employed by the Government of Canada?

Mr. David Myer: Yes, I am.

The Chair: All right. But you're not with Public Works any more?

Mr. David Myer: Yes, I am.

I have an opening statement that might help clarify that.

The Chair: I'll get there in a minute.

So you have talked to a number of people.

The last question is this. Has legal advice been provided or paid for by the authorization of any official in the Treasury Board Secretariat or the Department of Public Works and Government Services or any other government department or agency? Is the government paying for your lawyer's bills?

Mr. David Myer: Yes, it is paying.

The Chair: All right, good.

I think that is about it. So, Mr. Myer, I turn the floor over to you for your opening statement.

Mr. David Myer: Good afternoon. I want to thank the chairman and the members of this committee for the opportunity to present my statement. I've provided copies to the clerk.

My name is David Myer. I'm presently director general of strategic and operational planning within the government information services branch at Public Works and Government Services. Through the 1990s I was employed by Public Works and Government Services where I held a number of different positions, principally in the communications field and in project management. More recently I was with Communication Canada, and on April 1 of this year I returned to Public Works and Government Services in the aforementioned job in strategic and operational planning.

With the chairman's permission, I shall provide a brief overview of my responsibilities during the period of 1997 to 2000. I will also speak to the issues I raised before the subcommittee a few weeks ago.

Prior to November 1997 I was employed within the supply operations branch of Public Works and Government Services and was responsible for management of various communications activities, including things such as fairs and exhibitions and special events. Public Works and Government Services created a new branch, the communications coordination services branch, the CCSB, in November 1997, and I was transferred to the new branch at that time.

In the months that followed the creation of CCSB, a new organization structure was developed and several new management positions were created. These positions were subsequently staffed through a competitive staffing process. I applied for and was ultimately successful in obtaining the position of director general, procurement services, at CCSB in June 1998 through this competitive staffing process.

The procurement services sector at CCSB provided contracting services to other government departments in the areas of communications and printing—contracting ranging from things like envelopes and writing services through to communications and public relations services. This sector employed essentially the same competitive procurement practices and procedures as were employed in other PWGSC procurement sectors.

Although CCSB was a separate branch within PWGSC, we shared best practices with other procurement experts both at the Treasury Board Secretariat and within Public Works and Government Services. Our staff participated with other procurement sectors in discussions on policy matters and used the same information tracking systems as were used by other PWGSC procurement groups.

This sector also employed contract quality control, legal review, and cost accounting services that were available within PWGSC when such services were required by procurement policy.

Shortly after I started the job I remarked that the procurement for advertising and public opinion research was being managed through another sector within CCSB. This was a client services industry relations sector separate from my procurement group. At this time, which was approximately in the summer of 1998, I approached the executive director, who was Mr. Guité at the time, with a recommendation that all procurement be handled through the procurement services sector under my management. Mr. Guité turned down my request.

I subsequently requested my staff to prepare a comparison chart that identified the difference between the procurement process that was employed in my area of responsibility and what we understood the process to be for advertising and public opinion research at that time. A second request was made to Mr. Guité using this information, and an agreement was made to transfer the procurement responsibility for POR, public opinion research, to my procurement sector later in 1998. However, Mr. Guité would not approve the transfer of advertising.

Once the public opinion research was transferred, the procurement procedures were normalized to conform to the procedures followed for the other contracting carried out in my procurement services sector. I believe this normalization exercise was successfully completed, and I base this on the Auditor General's report, chapter 5, where it stated that in respect to POR, “Selection of suppliers for standing offers followed the competitive process.”

I took on new responsibilities in CCSB in December 1999, and to my knowledge advertising was never transferred to the procurement unit. My new responsibilities included coordination of government online and service improvement initiatives.

The second point I wish to raise concerns my role in replacing the executive director. As a member of the CCSB management team, I was called upon to replace the executive director for brief periods when he was absent from the office due to illness, travel, or while he was on vacation. In these situations I would be given the executive director's correspondence and signature books. These contained the usual correspondence, incoming and outgoing mail, administrative documentation, as well as occasional invoices that needed to be approved at the executive director level. As these invoices were generally for services of which I didn't have a first-hand knowledge, I would consult with the appropriate director general or senior officer of the program area to determine if it was appropriate to approve the particular invoice.

º (1605)

From time to time the invoices I received were for sponsorship services provided by a communications agency. Since the sponsorship program was managed directly by the executive director himself, I would consult the next most senior staff in the office—and this was the administrative officer—to verify the validity of the invoice. To facilitate matters, at some point in time I requested that the administrative officer identify that the work was completed and the contract was in place by placing an okay and initialling the invoice. This was a practice commonly in use at Public Works at that time.

To my knowledge, any invoice that I signed had received either a verbal or written okay from the administrative officer. If I did not obtain a satisfactory response to any questions I raised, I would not sign the invoice.

In closing, during the period in question at CCSB the activities for which I was directly responsible did not operate independently from the framework of rules and regulations that were in place at the Department of Public Works and Government Services. There was a mechanism in place to provide financial oversight. As an example of this, there was an independent financial officer who reported to the department's senior financial officer who was present at all CCSB management meetings. I had no reason to suspect that any of the sponsorship invoices presented for approval were in any way suspect or did not represent actual services delivered.

Thank you for your time.

º (1610)

The Chair: Thank you very much.

You have a point of order, Mr. Kenney.

Mr. Jason Kenney (Calgary Southeast, CPC): Yes, Mr. Chair.

I know that this technical issue has been raised many times with different witnesses, but when we receive detailed, substantive opening statements like this, it would be extremely helpful to the committee and its efficient operation to have written copies distributed. I understand the problems with respect to translation, etc., but I would ask the committee and its staff to do everything possible to get us these written statements on time, because here we are all scribbling down notes. We're going to be asking questions to clarify if he said certain things. If we actually had the written document in front of us, we could probably save an awful lot of time.

Just on a second point related to that, KPMG, on at least two occasions, has advertised that they would be giving us a “will say” briefing, having pre-interviewed witnesses, and I haven't seen that kind of information, which could also help our efficient questioning of witnesses.

The Chair: Thank you, Mr. Kenney. I appreciate very much your comments. It is frustrating for everybody not to have the opening statement in writing. As we know, we've been trying to schedule the witnesses ahead of time, so they know when they're coming here, could prepare themselves, and we could do the translation, but we are in this situation where we are having to chop and change witnesses according to motions that come before the committee and it makes it difficult. We slated Mr. Myer in at a fairly late date to come here because Mr. Quail couldn't come.

Ms. Wasylycia-Leis.

I'm not going to prolong this point.

Ms. Judy Wasylycia-Leis (Winnipeg North Centre, NDP): Mr. Chair, I believe if you'll survey the members, you may find unanimous consent to circulate the English only version this afternoon, with the French to follow as quickly as possible.

The Chair: Okay. There is a request for unanimous consent to distribute the English.

No, there is no unanimous consent.

We will proceed.

Mr. Toews, please, eight minutes.

Mr. Vic Toews (Provencher, CPC): Thank you very much.

I noted that you indicated earlier that you had an opportunity to discuss your evidence to refresh your memory with colleagues in the department. Is that correct?

Mr. David Myer: That's correct.

Mr. Vic Toews: Did you provide a copy of your presentation that you gave us here today to anyone to review before you came here today?

Mr. David Myer: No, I didn't.

Mr. Vic Toews: Other than sharing that with your lawyer--that would have been the only person who would have seen it.

Mr. David Myer: That's correct.

Mr. Vic Toews: With respect to the issue of the transfer of advertising to procurement, why did you see that as an important thing to do? What gaps or problems were there in the existing system, and how did you think those would be overcome by the transfer?

º (1615)

Mr. David Myer: In the initial approach to Mr. Guité, I would base it on what I would say are good management practices. The issue for me was that we had one branch that had two distinct areas where procurement was being undertaken. To me, from just a good governance perspective, it made more sense to have that all through one area of the organization with a consistent approach.

Subsequently, after I was refused the first time, we did what I would call kind of a gap analysis between, from casual observation, how things were being done on the advertising side versus the mainstream procurement. The issues in that case, I would say, circulated around the way the open bidding process was working. The bid opportunities didn't seem to be very well defined. It was also our sense that the advertising people were not using the illegal review or they didn't have an operational contract quality control system in place. So we felt that these were gaps that existed.

Mr. Vic Toews: So that transfer then, let's say to procurement, would have, in your opinion, remedied some of those problems. How would that have remedied it in terms of the governing rules that were in place?

There seem to have been rules. Indeed, when you replaced the executive director and you asked the directors general to give you some assistance, you also asked the administrative officer to sign off on the invoices, whether it was a verbal or written okay. There seem to have been some rules that you were operating under, even in the context of that existing framework. Would the rules in procurement have been any different?

Mr. David Myer: Well, the rules in procurement were ones that were employed by the department. These were the ones that formed part of the standard operating procedures and the supply policy. I can't speak to the specific rules that may have been used in other parts of CCSB, but certainly the rules in procurement were ones that were the accepted rules and the ones that we know from our dealings with other procurement groups were the correct ones to use.

Mr. Vic Toews: We heard earlier testimony from a witness, and I don't know if you're familiar with it. Indeed it was Mr. Allan Cutler's evidence that prior to 1994 there was a clear distinction between procurement and the analysis of whether value in fact had been received. That had existed prior to 1994. I can't remember how far back Mr. Cutler had indicated that had existed, but that separation he found important in order to ensure that there was an appropriate check and balance.

In November 1994, under then Minister Dingwall--and whether Minister Dingwall had anything to do about it or not we don't really know, but that oversight function collapsed into one function so that procurement and the watchdog were one person. Would your suggestion back in 1999 to transfer this advertising function to procurement have put it back to that pre-1994 situation and separated those two functions again?

Mr. David Myer: I don't believe it would have brought it back to the exact same state that existed pre-1994, because both the management function and the procurement function reported up to the same executive director, who was Mr. Guité, but it would have put it in two distinct arms of his operation.

Mr. Vic Toews: So it would have tried to provide some independence in those two different functions.

º (1620)

Mr. David Myer: Yes.

Mr. Vic Toews: Who was the senior financial officer, and who was the independent financial officer during the time you were there?

Mr. David Myer: There were several financial officers assigned to CCSB over the period in question. I can recall a couple of names--Christiane Bouvier and Margaret Baxter--but I may be missing a couple of others.

Mr. Vic Toews: Perhaps you could check with your former department, or maybe the clerks could get that for us.

And the independent financial officer, any idea?

Mr. David Myer: That would have been the people I just mentioned. They would have reported up to Jim Stobbe, who was the senior financial officer.

Mr. Vic Toews: Oh, I see. The independent financial officer then reports to the senior financial officer.

The administrative officer who you had okaying or initializing documentation and invoices, what was the name of that individual?

Mr. David Myer: That was Huguette Tremblay.

Mr. Vic Toews: All right. She was here before, and she gave us some testimony. One of the things she said to us was that it was very difficult for her, because not only.... It was very difficult to bend or to break the rules because there were no rules in place.

Can you give us any further elaboration on that? Was that concern ever expressed to you?

Mr. David Myer: The only rule I can really refer to from when I was acting for the executive director was the approval of the invoices, which would be section 34 under the FAA. I think the approval process under the FAA is quite clear. There has to be a contract in place, there has to be money available to pay, and the work has to be completed.

Those were the questions I would have posed to Huguette Tremblay prior to signing.

Mr. Vic Toews: All right.

Now, you've had a chance to review the Auditor General's reports concerning your area--not that you're necessarily responsible, but the area you were in. Do you have any comments you could add to what the Auditor General has stated?

Mr. David Myer: There's nothing I can add to it, really, other than the fact that I was very surprised to find out a lot of the details of the sponsorship program.

Mr. Vic Toews: So you were even sort of kept out of the loop on that issue.

Mr. David Myer: Yes. Again, referring back to the management table at CCSB, sponsorship activities were never discussed.

Mr. Vic Toews: They were never discussed at the management table.

Mr. David Myer: That's correct.

The Chair: Time, Mr. Toews, thank you very much.

Monsieur Desrochers, s'il vous plaît, huit minutes.

[Translation]

Mr. Odina Desrochers: Thank you very much, Mr. Chairman.

Mr. Myer, when did the nature of your responsibilities change? You mentioned a separate advertising department and a public opinion research group and noted that at some point, the unit responsible for sponsorships was set up. What was your role in all of this? What type of work were you doing beforehand and what new responsibilities were you assigned? According to your opening statement, everything happened rather quickly.

[English]

Mr. David Myer: Prior to, I would say, late 1998, I was responsible for procurement services to other government departments. These were procurement activities we would do on behalf of, say, National Defence or Health Canada. Sometime late in 1998, Mr. Guité transferred the internal responsibility for public opinion research over to my area of responsibility.

So that was an internal requirement that we were doing. That was the change.

[Translation]

Mr. Odina Desrochers: Mr. Myer, from 1998 onward, did you see the name Earnscliffe in any of the bids submitted?

[English]

Mr. David Myer: I can't specifically recall Earnscliffe coming up. I wouldn't really be able to recall the names of all the companies that bid on POR contracts without actually referring back to the files themselves. I can recall, though, that there was no discussion about Earnscliffe in any particular manner or form.

[Translation]

Mr. Odina Desrochers: From 1998 onward, call you recall how many public opinion research firms were usually bidding on contracts of this nature?

[English]

Mr. David Myer: Again, it's a difficult question to reply to. I would say it would vary from just a small number, two or three, who would respond to a particular competitive bid, to in some cases 10 or 12 firms who would respond to a competitive bid. It would vary from particular project to project.

º (1625)

[Translation]

Mr. Odina Desrochers: Mr. Myer, has Paul Martin's office ever tried to influence you by asking you to intervene on behalf of a particular firm, or to choose one firm over another? You never had any contact with these persons after 1998?

[English]

Mr. David Myer: No, I was never in contact with or had any kind of influence from Mr. Martin's office.

[Translation]

Mr. Odina Desrochers: Were you ever in contact with other ministers during your tenure as acting director, in Mr. Guité's absence, or was it Mr. Guité who maintained all of these contacts?

[English]

Mr. David Myer: I personally never received any calls or contacts from ministers while I acted for Mr. Guité.

[Translation]

Mr. Odina Desrochers: Witnesses have testified, however, that while Mr. Gagliano may have not contacted the branch directly, his office would issue orders directly through Mr. Pierre Tremblay and Mr. Jean-Marc Bard. Did these persons ever contact you, or were they only in touch with Mr. Guité?

[English]

Mr. David Myer: No, I never received any contact from the minister's office. No.

[Translation]

Mr. Odina Desrochers: There's a matter that I'd like to discuss further with you, Mr. Myer. You told us that when Mr. Guité assigned various responsibilities, you pointed out to him that he was doing things somewhat differently from other units. You also told us that when you informed Mr. Guité of this fact, he indicated that he did not want to conform to the same rules as other units within his department.

Could you tell us a little how this conversation unfolded?

[English]

Mr. David Myer: I should point out that I never had access to any of the advertising files. Most of my analysis was based on observations of what we saw was happening in the advertising procurement. Based on that, I approached Mr. Guité and I suggested that he really had two different processes operating within his branch and that just from a good management practice standpoint it made a lot more sense to bring them together. It would provide him with better security and better oversight on his operations. I basically presented that to Mr. Guité. His decision was not to make the transfer, and there was no further discussion after that.

[Translation]

Mr. Odina Desrochers: You also stated, Mr. Myer, that Mr. Guité was more receptive following a second presentation that you made.

What transpired between the two presentations to account for this change of heart?

[English]

Mr. David Myer: I don't know what specifically changed Mr. Guité's mind between the two presentations.

[Translation]

Mr. Odina Desrochers: Did your relationship with Mr. Guité change after you recommended that processes in all units under his authority be standardized, or did you the relationship remain cordial? Did you ever feel like you were persona non grata?

[English]

Mr. David Myer: No, there was no change in our relationship during the period in which I reported to Mr. Guité. I'd say we kept a professional, cordial relationship during the entire period.

[Translation]

Mr. Odina Desrochers: Did you continue working for the same group after Pierre Tremblay's arrival?

[English]

Mr. David Myer: When Mr. Tremblay arrived, I left the procurement group and took on new responsibilities within CCSB, continued within CCSB, involving government online initiatives and service improvement initiatives. I stopped being responsible for procurement activities in December 1999.

[Translation]

Mr. Odina Desrochers: Then, you left your job at the same time as Mr. Guité. You never worked with Mr. Tremblay.

[English]

Mr. David Myer: I reported up to Mr. Tremblay because he became the executive director, so I still reported to Mr. Tremblay.

[Translation]

Mr. Odina Desrochers: I have one last question, Mr. Chairman.

After you made certain comments to Mr. Guité, did you notice if anything changed after Mr. Tremblay arrived on the scene and if processes were standardized so as to fall into line with the practices of all of the other units under his authority?

º (1630)

[English]

Mr. David Myer: To the best of my knowledge, after Mr. Guité left and Mr. Tremblay took over as executive director, there was no change to the procurement process.

The Chair: Merci beaucoup, Monsieur Desrochers.

Mr. Murphy, please, you have eight minutes.

Hon. Shawn Murphy: Thank you very much, Mr. Chair.

Mr. Myer, I want to pursue with you how this advertising and sponsorship group was able to either be pulled out of the loop or taken out of the loop from Public Works and Government Services.

In the organizational chart, were you and Mr. Guité of a comparable level?

Mr. David Myer: No, I was one level below Mr. Guité.

Hon. Shawn Murphy: But you didn't report to Mr. Guité?

Mr. David Myer: I did report to him. When TCSB was created, I reported directly to Mr. Guité.

Hon. Shawn Murphy: On procurement, but when you were trying to take over some of the operations of his department, I take it your evidence is you didn't report to him at that time.

Mr. David Myer: No, I still reported to him. Mr. Guité was responsible for CCSB, which is a branch that included many activities, among them sponsorship and procurement. Mr. Guité still was executive director for all those activities, and I still reported up to him.

Maybe I could partly clarify that issue by saying that the way procurement is handled in Public Works there are other levels of oversight independent from the immediate management, including legal review and contract quality control. There is a community of practice within Public Works on procurement issues.

Hon. Shawn Murphy: But, Mr. Myer, for the sponsorship files we've reviewed, this department seemed to have been pulled out of the normal government channels. We didn't see and we didn't hear any evidence of legal review, contract review, oversight. Those things certainly haven't come to this committee. Do you agree with that?

Mr. David Myer: I would agree with that, yes.

Hon. Shawn Murphy: What I'm trying to get out of you is an answer to how it happened that this group was pulled out of what I consider the loop?

Mr. David Myer: As to how it happened, I don't know why or how it happened. I can say specifically that when CCSB was created, that was the existing situation. When CCSB was created, it was created with these two distinct arms that were handling procurement. That was how the organizational structure had been set up right at the beginning. They had been pulled out and separated well before the creation of CCSB.

Hon. Shawn Murphy: What year was that? It was 1996, was it?

Mr. David Myer: CCSB was created in November of 1997.

Hon. Shawn Murphy: When you were acting for Mr. Guité, I'm interested in finding out whom you reported to. Did you report to Mr. Pelletier, or to Mr. Gagliano?

Mr. David Myer: In theory I would have reported up to the deputy minister.

Hon. Shawn Murphy: But the evidence we've heard is that the deputy minister had very little if any involvement in this department. His evidence is he was out of the loop.

Mr. David Myer: He wasn't out of the loop as far as I was concerned. If I had had any need to consult with a senior official, it would have been first to the deputy minister.

Hon. Shawn Murphy: So you were clear in your mind that for any reporting you would have gone to the deputy minister?

Mr. David Myer: Absolutely. As well, I believe there's been testimony given here that CCSB operated as an independent arm or body of Public Works, and I would take some exception to that remark in saying that from my experience, in the areas I was responsible for, we were fully integrated with mainstream Public Works financial systems and procurement systems.

Hon. Shawn Murphy: But not in the sponsorship program?

Mr. David Myer: Evidently not.

Hon. Shawn Murphy: From your review, did you see anything during the times you were there of money missing or any instances where the Financial Administration Act was not being complied with?

Mr. David Myer: I was not aware during that period of any instance where the FAA was not applied to it.

Hon. Shawn Murphy: You've testified to Mr. Toews that when you looked, from the outside looking in, at Mr. Guité's department you thought the advertising, the sponsorship, the procurement issues would have been better handled by your department. Is that correct?

Mr. David Myer: That's correct.

Hon. Shawn Murphy: And you went to Mr. Guité. You approached him, and on the second approach he agreed that the advertising procurement would come over to your section?

Mr. David Myer: The public opinion research—

º (1635)

Hon. Shawn Murphy: I'm sorry, I meant the public opinion research. But advertising he would not relinquish?

Mr. David Myer: That's correct.

Hon. Shawn Murphy: But you felt at the time that it would be much better handled if it were handled by your department?

Mr. David Myer: That's correct.

Hon. Shawn Murphy: Did it ever occur to you to make your concern known to the deputy minister?

Mr. David Myer: I saw no specific reason to raise it to a higher authority. I didn't have any real evidence that would have caused me to raise it. The delegation of authority delegated that authority to Mr. Guité, and once the authority was delegated, it was basically his choice as to where he delegated it within the organization. He was working, I would believe, within his management prerogative to decide to delegate that authority to another part of the organization.

Hon. Shawn Murphy: But you were aware at the time with regard to the sponsorship projects that Mr. Guité would have himself picked the ad agencies, picked the projects, supervised the preparation of the contracts, determined whether or not the deliverables had in fact been delivered, and authorized the cheques. He would have performed all five functions.

Mr. David Myer: I didn't have access to that level of information. No, I was not aware of the specifics of how the sponsorship was handled at that time.

Hon. Shawn Murphy: But you'll agree with me that if that were the case it would be unusual and improper.

Mr. David Myer: It would be generally not good practice to do it that way.

Hon. Shawn Murphy: In the department was there any discussion or talk as to impropriety in the giving of sponsorship contracts or advertising contracts? Was this a discussion that you had with any of your colleagues within this department?

Mr. David Myer: I would say that over a period of many years advertising was considered to be a very politically sensitive commodity, and there was always discussion about how close the advertising procurement was to the political side of things. But that was just casual discussion about that. Partly that was supported by the fact that at that time the procurement policy—what's called appendix Q of the procurement policy—gave the authority to the ministers to approve the selection of communications agencies. So it was, to some extent, an actual extension of that policy to have political involvement in it.

Hon. Shawn Murphy: Would you let me follow this up a bit? You're saying—I didn't realize this before—that the minister would have the authority to determine the advertising companies. But in your case would he have the decision to determine the public opinion firms too or would that be done by you?

Mr. David Myer: That would be done through the competitive process. For the procurement we did, the general mainstream procurement, whether it be for printing or whatever, the final selection, the final winner of the bid solicitation process, was done through competitive process, not by a minister.

Hon. Shawn Murphy: You're saying there's a total distinction between advertising on the one hand and public opinion on the other hand.

Mr. David Myer: Yes.

Hon. Shawn Murphy: Is it still done that way, do you know?

Mr. David Myer: Appendix Q was removed from the procurement policy last year, I believe.

The Chair: Thank you very much, Mr. Murphy.

One question, Mr. Myer. In fact it's not a question, but based on Mr. Murphy's point, you've made mention of the delegation authority granted to Mr. Guité. I think perhaps the committee should get a copy of that delegation authority. So we can just request that through the normal channels.

The other thing I forgot to mention to you is that there will be votes tonight, so we will have to wrap up around 5:30 or 5:40.

Mr. Thibault.

Hon. Robert Thibault: Following on the point you have just raised, could we also ask if there was any reference in the delegated authority to the deputy minister that referenced the authority to Mr. Guité?

The Chair: Okay, repeat that again.

Hon. Robert Thibault: I'm just wondering if there is any reference in the delegated authorities to the deputy minister, if there's any reference in his authorities, to the work of Mr. Guité or his equals.

The Chair: Was there authority from the minister to the deputy minister, deputy minister to Mr. Guité?

Okay, understood.

Mr. Lastewka.

Hon. Walt Lastewka: The witness did mention earlier a chart in his opening statement.

The Chair: Is that chart available? You mentioned in your opening statement that you prepared a chart, a comparison chart between the normal process and what you thought was going on. You said:

Is that chart available?

º (1640)

Mr. David Myer: I presently don't have a copy of that chart. A copy may be available from the procurement people at the Department of Public Works and Government Services Canada.

The Chair: Okay, we will request that as well.

Thank you very much, Mr. Lastewka.

Moving on to Ms. Wasylycia-Leis, please, eight minutes.

Ms. Judy Wasylycia-Leis: Thank you, Mr. Chairperson.

Thank you, Mr. Myer, for your presence here today.

I may have missed this, but I'm wondering if you could tell us again how many times you would have filled in for Mr. Guité.

Mr. David Myer: I really don't have a count of exactly how many times, but I would hazard a guess of maybe about a dozen times over that period.

Ms. Judy Wasylycia-Leis: How many years is it?

Mr. David Myer: Mr. Guité was there for about a year. It would be over about a year and a half.

Ms. Judy Wasylycia-Leis: And for what period of time would you be filling in for him?

Mr. David Myer: It could be for something as short as half a day to I think four or five days.

Ms. Judy Wasylycia-Leis: Did he leave you any instructions about dealing with any of the issues, such as the sponsorship files, before he left or when he delegated that authority to you?

Mr. David Myer: No, none whatsoever.

Ms. Judy Wasylycia-Leis: In those periods of time, were you ever contacted...? You said already you weren't contacted by any ministers. What about staff from the Prime Minister's Office?

Mr. David Myer: I do recall receiving a couple of calls from the PMO while I was acting.

Ms. Judy Wasylycia-Leis: Who from the PMO would contact you?

Mr. David Myer: The calls came from Mr. Pelletier's office.

Ms. Judy Wasylycia-Leis: What was the nature of the calls?

Mr. David Myer: From my recollection, the requests were to find the status of a particular sponsorship—where it was in terms of the process of approval.

Ms. Judy Wasylycia-Leis: Did he ever instruct you to change a decision?

Mr. David Myer: No. It was really just a call seeking information.

Ms. Judy Wasylycia-Leis: How often did you say Mr. Pelletier might have called you?

Mr. David Myer: Well, it wasn't him; it was one of his staff in his office. I don't believe there were more than two or three times.

Ms. Judy Wasylycia-Leis: The Auditor General, as you will know from reading the report, has indicated that there were sponsorship files with very little or insufficient supporting documentation. You've already told us that from your point of view everything was there, in terms of the contract, the invoice, and evidence to show that the work was done.

Mr. David Myer: I never really saw all the documentation. I relied on the administrative officer, because sometimes it was very bulky or awkward information. I relied on the administrative officer to provide me a verification that the work had been completed and the contract was in place. I didn't have enough of a detailed understanding of the particular project to do that verification myself.

Ms. Judy Wasylycia-Leis: But you were there to fill in—you were of a fairly high rank in the group—for Mr. Guité whenever it was necessary. Did you ever get a sense of a process that may have been less than complete or less than what you would have normally experienced?

Mr. David Myer: I had nothing specific leading me to believe rules and regulations were being broken.

Ms. Judy Wasylycia-Leis: Does reading the report bring to mind anything that might have happened that would have caused you some angst?

Mr. David Myer: Clearly, having a better understanding of the process would have probably led me to ask more questions before I signed the document, in hindsight. Certainly at the time, from what I recall of seeing the invoices, they looked like legitimate invoices. I was assured that the work had been completed. I had some kind of written verification from the most senior person in the office at that point in time that the work had been completed. I had no reason to believe there was anything amiss in approving those particular invoices.

Ms. Judy Wasylycia-Leis: Looking back, do you think that perhaps there was a purpose on the part of Mr. Guité to keep you in the dark?

Mr. David Myer: I'm not a big believer in conspiracy theories, but I have woken up some mornings thinking about that—once in a while. I really don't think there was a conspiracy in place, no.

Ms. Judy Wasylycia-Leis: Do you think it was his intention to have people around him and have the work divided up so that no one ever really knew what was going on completely, but only he knew what was going on; that therefore you were useful to him in carrying out the necessary components to the job, but never had enough information to be able to question his decisions?

º (1645)

Mr. David Myer: I agree with your statement that the information was segregated, because there was really no way to know what was going on within the sponsorship program unless you spoke to one of the few individuals who were directly involved with it. That led to reliance on those individuals to provide the necessary information, yes.

Ms. Judy Wasylycia-Leis: I don't understand why your position in procurement ended immediately upon the retirement of Mr. Guité. You said that in September 1999 when Pierre Tremblay came in you were moved from procurement to another part of the group, to data—

Mr. David Myer: It was to strategic communications. Well, it didn't coincide exactly with Mr. Guité's departure, but it was soon thereafter, and that was because new responsibilities came into CCSB. At that time, in discussions with Mr. Tremblay, who had become the executive director, we felt I would be more useful to the organization working in an area on these new files that had come into place.

Ms. Judy Wasylycia-Leis: I have a couple of specific items from the Auditor General's report just to see if you know about them.

In section 3.68 of her report she states that there was no visibility plan in almost half of the files examined, and she refers to the example of a $5,600 sponsorship to a college where the only visibility that resulted was the placing of an MP's name on a mural. Were you aware of that case at the time, or have you heard about it since then, or were you involved in its processing at any stage?

Mr. David Myer: I had no knowledge of any sponsorship project during the period when that program was running. Any knowledge I've gained would have been subsequent, after the audits were completed.

Ms. Judy Wasylycia-Leis: Would the same apply to her concerns about the fact that in about half of the files there was no post mortem report?

Mr. David Myer: Again, I'll go back to my original statement, which is that I relied on the administrative officer to provide me with a verification that the work had been completed. I really did depend on those individuals to tell me whether or not those necessary documents were in place or not.

Ms. Judy Wasylycia-Leis: Thank you.

The Chair: Thank you very much, Ms. Wasylycia-Leis.

A question, Mr. Myer. You mentioned in your opening statement that you filled in for Mr. Guité during his vacations, but you also said to Ms. Wasylycia-Leis that you would fill in for half a day to four or five days. Did Mr. Guité ever take a prolonged vacation of two to three weeks?

Mr. David Myer: Again, I can't recall specific dates. He might have, but it was also common practice to rotate the acting among the management team.

The Chair: Oh, I see. Okay, so there was more than one person filling in for Mr. Guité. You weren't the sole person who would fill in during his absence.

Mr. David Myer: That's correct.

The Chair: All right. Thank you very much.

Ms. Ablonczy, please, eight minutes.

Mrs. Diane Ablonczy: Thank you, Mr. Myer.

You said in your testimony that you had recommended that all procurement be handled under your management and that Mr. Guité turned down your request for that and also would not approve the transfer of advertising. Can you tell the committee what rationale, what reasons, were given for Mr. Guité's non-compliance?

Mr. David Myer: Mr. Guité did not provide me any explanation as to his decision. It was just basically a “no”.

Mrs. Diane Ablonczy: Did you discuss this with anyone else?

Mr. David Myer: After the original refusal I did discuss it with my procurement staff, and that's why we went back and thought we would provide a more structured presentation to Mr. Guité. So I did discuss it with my procurement staff, and that led to the second presentation to Mr. Guité. But after that, other than saying he agreed to transfer the research part of it, he didn't provide any explanation as to the advertising.

Mrs. Diane Ablonczy: When you took over from Mr. Guité from time to time, as you've described to Ms. Wasylycia-Leis, you said you had no reason to suspect that any of the sponsorship invoices presented for your approval were in any way suspect or did not deliver the actual services requested. What evidence did you have that the invoices were proper and that they represented actual services?

º (1650)

Mr. David Myer: Well, the first evidence would have been the invoice itself. The invoices, from what I recall, looked like legitimate invoices.

What I would do to question.... Because the nature of the work was sometimes fairly complex, again, I'd turn to the administrative officer who was supposed to have been maintaining a full file on each project and ask her to verify if the money was available, the contract in place, and the work had been completed. I relied on that second-hand information, the information from her, and for her to pull out the necessary documents and verify the completion of the work.

Mrs. Diane Ablonczy: Did you ever call the agency and inquire about details that were not in the file?

Mr. David Myer: No, I never did.

Mrs. Diane Ablonczy: Do you now, in hindsight, think it would have been incumbent upon you to do so?

Mr. David Myer: My sense is that when you're acting for a short period of time replacing an individual, it's not good practice necessarily to question the practices that are in place in the office—particularly for a very short period of time like that. I had nothing that would lead me to suspect that I should second-guess the administrative officer. I certainly had no evidence or any other kind of discussion with anybody else that there were any questions with those invoices at all.

Mrs. Diane Ablonczy: Who was the administrative officer who would have provided you with this backup advice and information?

Mr. David Myer: That was Huguette Tremblay.

Mrs. Diane Ablonczy: The Auditor General said “The pattern we saw of non-compliance with the rules was not a result of isolated errors. It was consistent and pervasive.” In spite of that observation by the Auditor General, you didn't see any evidence that rules were broken?

Mr. David Myer: There was no evidence to me and nothing obvious that showed rules were being broken, given that I was only going in there on an acting basis and the number of invoices I signed would not have been a great number. This was an occasional thing from time to time.

Mrs. Diane Ablonczy: Mr. Myer, you worked in the branch, reporting to Mr. Guité. How often would Mr. Guité or his successor, Mr. Tremblay, meet with the minister?

Mr. David Myer: In the general sense, I would say it occurred frequently, virtually on a weekly basis.

Mrs. Diane Ablonczy: Would you describe the relationship between Mr. Guité and the minister of the day as a direct relationship?

Mr. David Myer: I suppose it could be characterized that way. There were a lot of communications between the executive director and the minister's office.

Mrs. Diane Ablonczy: To your knowledge, did anyone from the Privy Council Office or the Prime Minister's Office ever contact your office to intervene in a contract that was being awarded?

Mr. David Myer: I personally never had any attempted intervention by either PCO or PMO while I was at CCSB.

Mrs. Diane Ablonczy: Did you observe any intervention involving other members of the small group that worked in that area?

Mr. David Myer: I'm not aware of it. That would not have been something that would be obvious to anybody else working in CCSB at the time.

Mrs. Diane Ablonczy: Who was responsible for dealing with the advertising agencies in your office?

Mr. David Myer: That responsibility rested within the other sector I mentioned in my opening statement, the client services and industry relations sector. They handled all the relationships and dealings with the advertising agencies.

Mrs. Diane Ablonczy: Did you personally ever meet with anyone from the advertising agencies?

Mr. David Myer: No, I never did.

Mrs. Diane Ablonczy: Mr. Myer, you're obviously a competent civil servant; you've been in the department for a long time and have worked continuously in the program that was set up. Did anything come to your attention—any discussion, any observations, did anything come to your attention—that there was a deviation from proper procedure in the operation of this program?

º (1655)

Mr. David Myer: Certainly from the period I was there, there were no indications that there was any deviation from rules or regulations at the time, no.

Mrs. Diane Ablonczy: Even though the Auditor General says it was continuous and pervasive, there was no evidence, no inkling that this was happening?

Mr. David Myer: No, none whatsoever. The sponsorship program was never discussed, and I certainly never had any access to any files or information.

Mrs. Diane Ablonczy: Thank you, Mr. Chairman.

The Chair: Thank you, Ms. Ablonczy.

Monsieur Thibault, s'il vous plaît; vous avez huit minutes.

Hon. Robert Thibault: Merci beaucoup.

Thank you very much, Mr. Myer, for appearing and for your frank answers. I'm just going to be trying to fill in a few gaps in the questioning.

First, I'm made aware that Mr. Steinberg, whom you would know from the department, had informed that Ernst & Young had made recommendations that procurement and advertising and public opinion research be removed from the sector, which had been envisioned solely as an advisory group, and be incorporated into the department's normal procurement stream. The second was that the existing contracting structure be maintained, but that more rigid controls be implemented. This is from the testimony of Mr. Steinberg.

Were you aware of these recommendations by Ernst & Young?

Mr. David Myer: At the time I was not aware of the Ernst & Young audit.

Hon. Robert Thibault: Would somebody have been discussing these with you, the recommendations you made, or putting that forward to you? Could it have come from this, or would this have been completely separate?

Mr. David Myer: As I said, at the time I was not aware of the Ernst & Young audit. I have subsequently read that audit, and there is a parallel between what I had been recommending to Mr. Guité and what that audit raised. I would have expected that somebody would have brought that audit to my attention when I got into the position of director general of procurement, but that was not the case.

Hon. Robert Thibault: So that wasn't done at the time.

I want to come back to the question of Madame Hugette Tremblay, who would have been advising you when you were in the relieving position. You say that sometimes as the administrative officer she would indicate to you that a file was complete enough for payment of invoice. You say sometimes that was done verbally.

Mr. David Myer: At the beginning, the first couple of times I replaced Mr. Guité, it was done verbally, but I found that usually I worked much later than Madame Tremblay did, so just to make things more convenient—I didn't get to the signature books until later in the day and she was gone—I asked her to signal her verification by putting an “OK” and initialling the invoice or doing a sign-off on the invoice.

Hon. Robert Thibault: Otherwise, you would have her telling you; she would essentially be telling you that she had verified the files and that the files met the Financial Administration Act, rather than you verifying the facts to ensure that it did.

Mr. David Myer: That's correct.

Hon. Robert Thibault: When you approached Mr. Guité at that time—I think you answered this already—you didn't consider going to a second level, discussing it with an ADM, or with the deputy minister. You indicated that it was clear to you that was always available, not necessarily for this instance, but as a matter of departmental operations; that this was not a stand-alone organization and that it was fully integrated within the department, and should you have seen a problem....

Mr. Guité was your immediate supervisor?

Mr. David Myer: That's correct.

Hon. Robert Thibault: Should you have seen a problem, you could go beyond him.

Would the next level you would go to have been an assistant deputy minister?

Mr. David Myer: No, Mr. Guité was equivalent to an ADM, so the next level would have been the deputy minister. But there are other recourses available in the department. If there are issues presenting themselves, it is possible to go to the senior financial officer or to the head of audit and review. There is other recourse available within the department.

» (1700)

Hon. Robert Thibault: I'm not asking you to refer to any cases—it's not the purpose of this committee—but has it happened to you in the past that you would have had to do that?

Mr. David Myer: I can't recall a specific case where I had to go above my supervisor's head.

Hon. Robert Thibault: Would you have been fearful to do that within the department?

Mr. David Myer: I would say, given that CCSB was created by the senior officials at Public Works in November of 1998 and Mr. Guité was put in charge of that organization, it would not, I think, have been a wise move to question Mr. Guité's judgment at that point in time.

Hon. Robert Thibault: Did you have the feeling as an employee of the department that he was an appointment from God, that he had free wheel?

Mr. David Myer: Well, I would say the sense is that Mr. Guité wielded a lot of authority within the department, yes.

Hon. Robert Thibault: You said there's a senior financial officer and an independent financial officer. Is the independent financial officer there in an audit function? Is he in the comptroller function in this branch?

Mr. David Myer: They're not there in an audit function. Part of their responsibility is to provide oversight of the financial actions that take place in the branch. Even after section 34 is approved on the invoice, the financial people have to sign section 33 before a cheque is issued.

Hon. Robert Thibault: How much time do I have, Mr. Chair?

The Chair: You have two and a half minutes.

Hon. Robert Thibault: Thank you.

The Auditor General, in a recent letter to us, makes it clear that in her mind, under the Financial Administration Act, section 34—and I have no reason to doubt her—supporting documents would have to be on file at Public Works, and not, as we've heard from communication companies, kept within those companies under contractual agreements. We've seen that the quick response team in some instances found full supporting documents, while in other instances procedure was quite questionable. In your mind, from when you were working within that function, was it clear where that documentation should have been? Should it have been at Public Works?

Mr. David Myer: It was absolutely clear to me. There was quite an extensive filing system just outside the executive director's office that had all the files by project. I knew there were documents in there. I didn't go through them myself, but they were certainly there.

Hon. Robert Thibault: So should the senior and independent financial officers within that system have picked that up? Should they have been verifying this?

Mr. David Myer: I can't speak to the practices of the financial officers, but they're there basically to provide some assurance that the financial practices in use within the branch conform to the policy and rules and regulations. Certainly, I was always subject to some level of financial oversight in my own dealings.

Hon. Robert Thibault: Were you there when the changes were made with the 37-point plan? When that was brought forward, were you present?

Mr. David Myer: Yes, I was there. That was after the audit of 2000.

Hon. Robert Thibault: Are you confident that with the rules in place now, subsequent to the 37-point plan and subsequent to the rules that have been changed recently, this type of thing has a greatly reduced chance of happening?

Mr. David Myer: It increased the amount of oversight and should greatly reduce the risk of this thing happening again.

Hon. Robert Thibault: Thank you very much.

The Chair: Merci beaucoup, monsieur Thibault.

Mr. Jordan, eight minutes.

Hon. Joe Jordan: Thank you, Mr. Chair. I will be splitting my time with Mr. Mills.

The Chair: Do you want me to divide it into four minutes?

Hon. Joe Jordan: Sure.

Mr. Myer, in your opening statement I believe you said through the nineties you were employed by Public Works. When did you actually start?

Mr. David Myer: It would have been back in the eighties.

Hon. Joe Jordan: Were you employed in APORS in the early nineties?

Mr. David Myer: No, I was not.

Hon. Joe Jordan: Did you work with it at all in your capacity in advertising? Were you familiar with it?

Mr. David Myer: No, I never had any direct dealings with APORS.

Hon. Joe Jordan: Okay.

I want to pick up on something Ms. Ablonczy said about your approach to Mr. Guité. I want to make sure it's clear. You weren't responding to anecdotal evidence or rumours around the office that something might not have been proper. It was simply based on a perception that this would deviate from normal management practices. Madam Ablonczy uses the term “non-compliance”. It's not that he wasn't complying with regulations within the department; it was just an unusual way to set up, splitting the function within one department. Is that correct?

» (1705)

Mr. David Myer: I would agree with that. I certainly had no evidence that there was non-compliance. I didn't have access to the files, so I would never have been able to determine that.

Hon. Joe Jordan: Okay.

We've asked for the document, and you've told us where to look for it. Can you think back on the two different processes? What would have been the differences? One of the things we're trying to work our way through here is how this was allowed to happen. It seems to me that had they moved advertising over with public opinion research when you asked them to, we wouldn't be sitting here having this discussion today. What, from your recollection, would have been the differences between the two processes?

Mr. David Myer: The main difference, I would say, would be that the procurement activity within the other sector in CCSB was very thin, very light. It had a relatively junior individual doing the procurement, and as I said, to the best of my knowledge, it had no contract quality control, no access to cost accounting, nor a lot of the other mechanisms that a full-service procurement shop would normally have in place.

Hon. Joe Jordan: The Auditor General's report certainly bears that out. That seems to be the area where the Auditor General has zeroed in on exactly what was going on here.

I'll give the rest of the time to Mr. Mills.

The Chair: Mr. Mills, five minutes.

Mr. Dennis Mills: Thank you very much, Mr. Chairman.

Mr. Myer, I'm well aware of your respected and long service with the Department of Public Works. People have informed me of the quality of your work over the last couple of days, and my understanding from your opening statements is that you have done everything--fairs, exhibitions, special events. When you operated in that particular sector of communications, did you do cost-benefit analysis?

Mr. David Myer: From time to time, in analysing a project or a proposal, we analysed the cost-effectiveness of the proposal, yes.

Mr. Dennis Mills: Then you went on to communications, public relations, and advertising. Did you sense that the same approach you used in fairs and exhibitions was used in the next phase of your journey?

Mr. David Myer: As I said, I didn't have any direct involvement with the advertising side of the procurement and the processes, but from casual observation, that would not have been the case.

Mr. Dennis Mills: One of the things Mr. Guité said when he was here last week is that all the files were there. There had to be an invoice with a file number attached to it before you could get a cheque requisition signed and ultimately a cheque. Was that your experience?

Mr. David Myer: That's always been my experience.

Mr. Dennis Mills: When you were substituting for Mr. Guité, was it the same then? Could you find the invoices?

Mr. David Myer: Certainly, that's what I was presented with. I actually got the signature books, and in the signature books would have been the actual invoice from the supplier. So it was always present. What wasn't present was the back-up documentation, and that's where I relied on the administrative officer.

Mr. Dennis Mills: Could you give me an example of what you mean by back-up documentation?

Mr. David Myer: If a supplier was invoicing for 50 hours of work, the invoice would have broken down the per diem according to the rate card of the people who were billing for time, but there would not have been, let's say, the time cards for those individuals and what projects they worked on. In some cases they may have worked on multiple projects encompassed in one billing statement.

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Mr. Dennis Mills: So you would have expected the time sheets from the corporation that submitted the bill.

Mr. David Myer: I would expect them to be on file. The practice in place at Public Works is that all that documentation is not usually passed up when you sign an invoice. It's often too bulky and too difficult to interpret, so you need to leave it to a specialist who's actually working in the program to verify that activity.

Mr. Dennis Mills: And what you were saying was that the department--Mr. Guité said he only had three or four or five people--was thin on specialists.

Mr. David Myer: Yes.

Mr. Dennis Mills: Okay.

Again I stress, you've been around for 22 years. Could you ever imagine a system where a director general can do work without the ADM and, ultimately, the ADM is not aware of what's going on?

Mr. David Myer: It's extremely surprising. In all the organizations I've worked with within Public Works I've never seen a model that worked in that fashion, where basically there was no accountability above the executive director, or the ADM level in this case.

Mr. Dennis Mills: So you're saying you've never seen, in 22 years, a situation where the ADM and the DM were not aware of what was going on.

Mr. David Myer: That's correct.

Mr. Dennis Mills: Thank you very much, Mr. Chair.

The Chair: You're welcome, Mr. Mills.

Mr. Toews, eight minutes.

Mr. Vic Toews: Thank you.

What we have here, then, is a very unusual situation, where the executive director is making decisions without the apparent knowledge of the deputy minister. There's a direct relationship between the minister and the executive director, as you've indicated. The agency seems to be working outside the frame of the regular civil service in reporting to the minister. Is that your impression?

Mr. David Myer: I can't speak to what knowledge the deputy minister had or did not have of what was going on in CCSB. I just can't answer that question.

Mr. Vic Toews: All right. So all you're saying is that the general rule, in your experience, is that the deputy minister would be involved in these kinds of decisions. So you would find it highly unusual to not have the deputy minister involved in that.

Mr. David Myer: That's correct.

Mr. Vic Toews: All right.

When you had your management meetings, you indicated that you didn't talk about the sponsorship files. Was that a glaring omission as far as you're concerned? That entire area was responsible for these sponsorship files. Isn't it unusual that the sponsorship files would never have been discussed at a management meeting?

Mr. David Myer: Probably not. Since the executive director managed that directly, he really didn't need to have the cooperation or the approval of any others of the management team to get things done. Generally, if I came to the management table, I would raise an issue in my area of responsibility when I needed to have something approved or to have the cooperation of a manager at the management table. This was not the case with sponsorship.

Mr. Vic Toews: So the stuff you would deal with at the management table would be areas where you responded to the executive director, or others around the table had a common interest, so their input was necessary.

Mr. David Myer: That's correct.

Mr. Vic Toews: It appears that with the sponsorship files there was really no input from colleagues, because the executive director had control of those files personally, or the small cadre of people around him, including his administrative assistant, would have had control.

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Mr. David Myer: Speaking from my responsibilities as DG of procurement, I certainly had no input whatsoever into the sponsorship program.

Mr. Vic Toews: Okay.

When you took the place of the executive director in that acting position, you indicated that you wouldn't give any approval without the verbal or written okay of the administrative assistant, but you knew there was an invoice there. When you have a contract, there are usually copies. Usually, the person providing the services has a copy of it; the person paying for the services has a copy. Would the contract also be available to you when you were looking at the invoice? I'm not saying you had it, but would it be in front of you?

Mr. David Myer: It could be there, a copy of the contract, certainly. I don't recall in specific cases whether it was there or not. It may have been sometimes.

Mr. Vic Toews: Your testimony is that you essentially relied on the administrative assistant to give you the okay as to whether the contractual provisions had been met and corresponded with the invoice.

Mr. David Myer: That's correct.

Mr. Vic Toews: When you were asked to make an approval of an invoice, you've indicated that often there were no back-up documents. I assume then you would have access to the actual file in which the invoice was.

Mr. David Myer: There were no back-up documents within the signature book itself. I didn't have that presented to me on the desk, but it was my expectation that those documents existed. Throughout my career at Public Works and Government Services I acted frequently in other instances for other individuals, and the general practice is that you only send up the invoice. The accompanying information is not generally sent up with the invoice.

Mr. Vic Toews: So what's the function of approving an invoice if you really don't have the material available to you to check whether the invoice reflects services done and whether it complies with back-up documents and the contract itself?

Mr. David Myer: The responsibility lies with the individual signing the invoice to make sure there's good practice and a system in place to ensure that this verification is indeed being done. I think that's where the responsibility lies.

Mr. Vic Toews: So you're really telling us that in those short periods of time--you've indicated that about a dozen times you replaced Mr. Guité for periods of half a day to four or five days--you didn't really examine the substance of those contracts, you relied on the administrative assistant, and once the administrative assistant said everything was in order, you would sign off.

Mr. David Myer: I relied on the process that was in place in the office at that time, yes.

Mr. Vic Toews: Did you ever ask to see the file, thinking the hours were a little high, 300 hours or that kind of thing? Was there ever that kind of situation?

Mr. David Myer: I do recall a couple of instances where I raised questions with the administrative officer. I wasn't necessarily satisfied with the answer I got, and I did look at documentation on a couple of those files. I believe in those cases I wasn't satisfied and didn't sign the cheques.

The Chair: Mr. Toews, I forgot that we're on a four-minute round. As I only have Mr. Tonks and Mr. Lastewka left and you've had seven minutes, I'll go seven and seven, and that will be it.

Mr. Tonks.

Mr. Alan Tonks (York South—Weston, Lib.): Thank you, Mr. Chairman.

Thank you very much, Mr. Myers. I'm very impressed, and I think the committee is, with the forthright manner in which you have answered the questions and the way you perceive your role. I think we can see that it is a professional role.

I'd like to go back to something you said. Who was the administrative assistant who would advise you? What was that person's name?

Mr. David Myer: That was Huguette Tremblay.

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Mr. Alan Tonks: That's right. She indicated that in her mind there really were no rules with respect to that part of the program. It would seem that your testimony bears that out. When you would ask her for clarification, against the benchmarks you had of professional oversight, the back-up was not in the file. Is that generally what your testimony would confirm?

Mr. David Myer: At the time it was my impression that the documentation was in fact there. Certainly, every indication I received was that the invoices were adequately backed up.

Mr. Alan Tonks: But you said, when you would look at time sheets and try to validate clumps of time against a particular invoice, that information wasn't there. Is that correct?

Mr. David Myer: I would not necessarily have seen that information. As I said--

Mr. Alan Tonks: Should it have been in with the invoice?

Mr. David Myer: Not according to general practice at that time. It would have been very difficult to decipher without intimate knowledge of the project and the activities involved. So the general practice was that only the invoice itself was passed up for signature, without the accompanying information.

Mr. Alan Tonks: I'm not quite sure what you're saying then. I thought you were saying that when you were in that particular position and being asked to sign off on an invoice, you wouldn't sign if there weren't certain documents there. What was it that you were looking for?

Mr. David Myer: There were a couple of cases I can recall when I asked whether work had been completed, and I was not satisfied with the answer I got. I may have looked at the documentation in those cases to clarify that, in my own mind. From what I recall, I wasn't able to satisfy myself, so I didn't sign the invoices in those cases. But generally, when I got a verbal okay or a written okay on the invoice from the administrative officer, I accepted that, trusted her judgment in that case, and signed the invoice.

Mr. Alan Tonks: Okay.

Part of the committee's role is to attempt to see where the system broke down. I'm interested, and I think the committee is interested in knowing, from a professional perspective, when ministerial oversight--deputy ministers and assistant deputy ministers included--and the links in the chain started to become broken.

You approached Mr. Guité and told him you thought it would be a good idea to include procurement with that architecture that would have accountability in it. When was that? Do you recall?

Mr. David Myer: I initially approached him in the summer of 1998.

Mr. Alan Tonks: Okay. He turned you down. What was the reason he gave for that?

Mr. David Myer: He provided no reason. He just felt that was the way he had set up the organization, and that was the way he wanted to run it.

Mr. Alan Tonks: What kind of a relationship did you have with Mr. Guité? You seem to be very personable and subject to the cut and thrust of collegiality. Wasn't that the style he used when you approached him with something like that?

Mr. David Myer: We never really had substantive discussions on the best way to manage activities within CCSB. Generally, his responses were fairly abrupt and short. So there was no real discussion on the pros and cons, let's say. We never had a substantive discussion on that.

Mr. Alan Tonks: What was Mr. Stobbe's role in the department, the unit?

Mr. David Myer: At the time of CCSB, Mr. Stobbe was the senior financial officer, so he oversaw the financial infrastructure of Public Works and Government Services.

Mr. Alan Tonks: Would you be interested to know that my colleague indicated in Mr. Steinberg's overview that the very approach you had recommended in 1996 was one of the major recommendations of the audit? It was rifled up to Mr. Stobbe that apparently between that and the establishment of the CCSB, no action was taken with respect to that.

Mr. Steinberg went on--there's a gap in his testimony--that when the audit was done in 2001, it actually came back with, chapter and verse, the kinds of things that had happened as a result of not...the due diligence that had been applied.

What was your role when you left CCSB? Where did you go at that time?

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Mr. David Myer: When I left CCSB I went to Communication Canada in an entirely different function.

Mr. Alan Tonks: At any time between the time you left CCSB or...well, the time you brought this to Mr. Guité, did you take the issue of the hierarchy in the department to any of your superiors?

Mr. David Myer: No. I never discussed the issue outside of CCSB.

Mr. Alan Tonks: Was there any reason for that? We all have the advantage of hindsight, but....

Mr. David Myer: At the time, I certainly had no evidence that the rules or regulations were being broken. My approach to Mr. Guité was on the basis of good governance. As I think I mentioned earlier, Mr. Guité had just been given that authority, so it would have been a little odd to question why he decided to set things up literally just months after he did that.

The Chair: Thank you very much, Mr. Tonks.

Mr. Lastewka.

Hon. Walt Lastewka: Thank you, Mr. Chair.

I know we're getting close to the end here, but I just want to carry on with Mr. Tonks' questioning.

From the standpoint that you were in there acting, and you understood that was the way the system was put in place for CCSB, did you see any guidelines in writing? Did you see anything that said that was the way it was set up in the sponsorship program?

Mr. David Myer: I really didn't see any documentation whatsoever for the sponsorship program.

Hon. Walt Lastewka: You mentioned earlier the fact that a number of people had been rotated to act in your position. How many people would you say were involved in that?

Mr. David Myer: I would hazard a guess that probably three other individuals may have replaced Mr. Guité or Mr. Tremblay.

Hon. Walt Lastewka: Is that similar in other areas, that when someone's away they rotate people through?

Mr. David Myer: Generally, yes, actings are rotated.

Hon. Walt Lastewka: It wasn't a position to rotate people through so that nobody could get familiar with the “unwritten” system?

Mr. David Myer: No, I don't believe that was the case.

Hon. Walt Lastewka: So when you were acting and you had to seek advice, you went to Mr. Quail?

Mr. David Myer: I never had occasion to seek advice, and I never pursued advice outside. When I was acting, any advice I needed I was able to obtain from within CCSB.

Hon. Walt Lastewka: Within the group itself?

Mr. David Myer: Within the group itself, yes.

Hon. Walt Lastewka: Did Mr. Quail ever ask you, when you were acting, to report on how things were going?

Mr. David Myer: No, I was never approached by anybody at all from Mr. Quail's office or from anywhere else in Public Works.

Hon. Walt Lastewka: When you were acting, was it for stretches of two weeks, five weeks, ten weeks...

Mr. David Myer: It was generally for very short periods of time. My recollection is that it didn't really extend beyond five days.

Hon. Walt Lastewka: So one week at a time, basically.

Mr. David Myer: Basically, yes.

Hon. Walt Lastewka: And at no time while you were acting did Mr. Quail come to you?

Mr. David Myer: No, I was never approached by Mr. Quail for any reason.

Hon. Walt Lastewka: Did you have any discussion with Mr. Gagliano?

Mr. David Myer: Certainly not during that period, no, I never had any discussions with Mr. Gagliano.

Hon. Walt Lastewka: You did mention earlier that you did have contact with Mr. Pelletier's office.

Mr. David Myer: I received calls from Mr. Pelletier's office inquiring about the status of a particular sponsorship file.

Hon. Walt Lastewka: Could you just review what kinds of questions you were asked?

Mr. David Myer: What kinds of questions? Sure. Where is the approval for sponsorship XYZ? Can you tell when the approval is going to be obtained? When can we expect the sponsorship to be issued?

Hon. Walt Lastewka: When you were acting, did you have any contact with the ad agencies?

Mr. David Myer: No, not that I recall.

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Hon. Walt Lastewka: Basically, you were doing the paperwork system, whatever it was.

Mr. David Myer: It would be fair to characterize it that way. I was just keeping the paper flowing through the organization.

Hon. Walt Lastewka: Thank you, Mr. Chair. You can have the last minute.

The Chair: Thank you, Mr. Lastewka.

Mr. Myer, I'm trying to get a vision of the office. You mentioned that there was a whole bunch of files right outside Mr. Guité's office, which I wouldn't imagine a normal executive director would have had. The files would have been off with the people who normally process the paperwork. Is that correct?

Mr. David Myer: Generally, they would be put into some kind of filing room--

The Chair: But not normally right at the executive director's front door.

Mr. David Myer: That's a little different than usual, yes.

The Chair: Okay.

Now, Ms. Huguette Tremblay said before the committee that they worked off a database. So you have an invoice. You're only there for a few days. You don't have any background. You go to Ms. Tremblay, she says okay, and you don't ask her whether she checked with the file; she just went to her database and said everything looked fine. You had no communication as to on what basis she said it was okay?

Mr. David Myer: Well, my questions were quite simple. Basically, was the work completed and was a contract in place? She responded, yes, the work was completed. That was a signal to me that it was okay to sign the invoice.

The Chair: We thank you very much for coming forward this afternoon--

Mr. Dennis Mills: Mr. Chair, before the witness leaves, you've touched on something that's very important. You talked about the files being outside Mr. Guité's door. They were all there in a....

I'd like to know what happens to files when people sort of move on. Do they go into some kind of archives or storage system or whatever? As you know, Mr. Guité said the files were there, but they couldn't find the files.

So what happens?

Mr. David Myer: If the function or the operations continue, the files just stay in place and continue to be maintained by the--

Mr. Dennis Mills: No, but if it discontinues, where do they put the files?

Mr. David Myer: They're either put into storage within the department or in some cases sent to public archives.

Mr. Dennis Mills: Thank you.

The Chair: Mr. Myer, I will allow you to withdraw and go out the back door...or the rear door, before I suspend the meeting. Do you have any final comments you would like to leave with this committee?

Mr. David Myer: No, I have none, thank you.

The Chair: Okay. Then I'll allow you to withdraw.

The meeting is adjourned.